BILL ANALYSIS Ó SB 469 Page 1 SENATE THIRD READING SB 469 (Vargas) As Amended May 10, 2011 Majority vote SENATE VOTE :21-14 LOCAL GOVERNMENT 5-3 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Skinner, Bradford, |Ayes:|Fuentes, Blumenfield, | | |Campos, Davis, Hueso | |Bradford, Charles | | | | |Calderon, Campos, Davis, | | | | |Gatto, Hall, Hill, Lara, | | | | |Mitchell, Solorio | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Smyth, Knight, Norby |Nays:|Harkey, Donnelly, | | | | |Nielsen, Norby, Wagner | | | | | | ----------------------------------------------------------------- SUMMARY : Requires a city or county to prepare economic impact reports before it approves or disapproves the construction or conversion of superstore retailers. Specifically, this bill : 1)Requires a city, county, or city and county (city or county) to prepare an economic impact report prior to approving or disapproving a permit for the construction or conversion of a superstore retailer. 2)Defines "superstore" as a business establishment that exceeds 90,000 square feet of gross floor area, sells a wide range of consumer goods, and devotes 10% of the sales floor area to the sale of items that are exempted from the Sales and Use Tax Law. 3)Specifies that the term "superstore" shall include retail establishments with multiple tenants under the same roof. 4)Specifies that the term "superstore" excludes discount warehouses and discount retail stores that sell more than half of their items in large quantities or bulk, and also requires shoppers to pay a membership or assessment fee. SB 469 Page 2 5)Utilizes an existing statutory definition of "market area" which states that an area that is recognized in the trade literature as large enough to support a specific big box retailer, but is no more than 25 miles from another big box retailer. 6)Authorizes a city or county to prepare the economic impact report themselves or contract with a private entity, other than the permit applicant, or with another public agency for the preparation of the report. 7)Requires the applicant for the development project to pay for the costs of preparing the economic impact report. 8)Requires the economic impact report include all of the following: a) An assessment of the extent to which the proposed superstore retailer will capture a share of retail sales in the market area; b) An assessment of how the construction and operation of the proposed superstore will affect the supply and demand for retail space in the market area; and, c) An assessment of how the construction and operation of the proposed superstore will affect employment in the market area, including all of the following: i) The number of persons employed in existing retail stores in the market area; ii) An estimate of the number of people who will likely be employed by the proposed superstore; iii) An analysis of whether the proposed superstore will result in a net increase or decrease in employment in the market area; iv) The effect on wages and benefits of employees of other retail businesses, and community income levels in the market area; v) A projection of the costs of public services and SB 469 Page 3 public facilities resulting from the construction and operation of the proposed superstore retailer and the incidence of those costs; vi) A projection of the public revenues resulting from the construction and operation of the proposed superstore retailer and the incidence of those revenues; vii) An assessment of the effect that the construction and operation of the proposed superstore retailer will have on retail operations, including grocery or retail shopping centers, in the same market area; viii) An assessment of the effect that the construction and operation of the proposed superstore will have on the ability of the city or county to implement the goals contained in its general plan; ix) An assessment of the effect that the construction and operation of the proposed superstore will have on average total vehicle miles traveled by retail customers in the same market area; x) An assessment of the potential for long-term vacancy of the property on which the superstore is proposed in the event that the business vacates the premises; xi) An assessment of whether the superstore would require the demolition of housing or any other action or change that would result in a decrease or negative impact on the creation of extremely low, very low-, low-, or moderate-income housing; xii) An assessment of whether the superstore would result in the destruction or demolition of park or other green space, playgrounds, child care facilities, or community centers; xiii) An assessment of whether the superstore would result in any other adverse or positive economic impacts or blight; and, xiv) An assessment of whether any measures are available that may mitigate any materially adverse economic impacts SB 469 Page 4 identified by the applicant. 9)Specifies that nothing in this measure precludes a city or county from conducting additional studies of the effects of the construction and operation of a proposed superstore retailer. 10)Requires city and county governing bodies to provide the opportunity for public comment on the economic impact reports and their findings at regularly scheduled meetings after the reports' completion but 30 days before issuing any entitlements. 11)Requires a lead agency, under the California Environmental Quality Act (CEQA), to approve or disapprove a project within 180 days from the date of certification of an environmental impact report and approval of an economic impact report, or within 60 days from the date of adoption of a negative declaration and approval of an economic impact report or the determination by the lead agency that the project is exempt from CEQA and approval of an economic impact report. 12)Makes findings and declarations that the measure applies to charter cities and charter counties because the effects of superstore retailers are a matter of statewide concern that extend beyond local boundaries. EXISTING LAW : 1)Requires, under the Permit Streamlining Act, each state agency and local agency to compile one or more lists that specify in detail the information that will be required from any applicant for a development project, and requires a public agency that is the lead agency for a development project, or a public agency which is a responsible agency for a development project that has been approved by the lead agency, to approve or disapprove the project within applicable periods of time. 2)Prohibits a local agency from providing any form of financial assistance to a vehicle dealer or big box retailer, or a business entity that sells or leases land to a vehicle dealer or big box retailer, that is relocating from the territorial jurisdiction of one local agency to the territorial jurisdiction of another local agency but within the same SB 469 Page 5 market area. 3)Requires, under CEQA, lead agencies with the principal responsibility for carrying out or approving a proposed discretionary project to prepare a negative declaration, mitigated declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). 4)Requires each planning agency to prepare and the legislative body of each county and city adopt a comprehensive, long-term general plan for the physical development of the county or city, and of any land outside its boundaries which in the planning agency's judgment bears relation to its planning. FISCAL EFFECT : According to the Assembly Appropriations Committee, by requiring cities and counties to prepare economic impact reports on superstore projects, this bill creates a new state mandate. The bill disclaims the state's responsibility for reimbursing local government, citing local officials' ability to charge processing fees that will offset their costs. If the local charges for the new economic impact reports do not exceed the reasonable costs of preparing and using those reports, those charges will be permissible local fees that can be adopted without a vote of the electorate. COMMENTS : According to the author, this measure "offers the public and local policymakers an opportunity to learn about the potential impacts of a superstore on other retail options in the area, as well as effects on housing, parks, traffic and jobs. The heart of the concept stems from proactive recommendations by a superstore company's (Wal-Mart) representative as a compromise to an ordinance in Los Angeles between an outright ban and no thoughtful oversight." The author states that the "goal of this bill is to create financial accountability and the transparency that local communities need to make land use decisions about the impact giant supercenters have on existing businesses, jobs, public services and neighborhoods. Small and neighborhood businesses are important financial elements to every local economy and function as the backbone to these economies. It's important to inform the public about the consequence that these superstores SB 469 Page 6 pose on small and neighborhood businesses before a superstore developer comes into a community and potentially imposes a risk to the local neighborhoods." This bill creates an economic impact report, not entirely dissimilar to the environmental impact report required by CEQA that local governments must prepare before approving or disapproving a development project that includes a superstore retailer. A superstore retailer is defined as a store greater than 90,000 square feet of gross floor area that sells a wide range of consumer goods, and devotes 10% of the sales floor area to the sale of items that are exempted from the Sales and Use Tax Law. The project applicant will pay for the report. This bill creates the framework and sets forth the assessments and projections that must be part of any report, but allows local governments to include any other factors they see fit. On the other hand, unlike CEQA, it creates no requirement that a local government base or condition its decision to approve or disapprove the project on the results of the economic impact report. The purpose of the report appears to be to allow local governments to make more informed land use decisions about superstore retailers. SB 1056 (Alarcón), which was vetoed by Governor Schwarzenegger in 2004, would have required a city, county, or city and county to prepare an economic impact report prior to approving or disapproving a proposed development project that would permit the construction of a superstore retailer, defined as a store greater than 130,000 square feet of gross buildable area that generates sales or use tax pursuant to the Bradley-Burns Uniform Local Sales and Use Tax that contains more than 20,000 stockkeeping units, and derives 10% of its total sales from the sale of non-taxable merchandise. SB 1523 (Alarcon) of 2006 similarly required an economic impact report to be prepared prior to a city's or county's approval or disapproval of a superstore retailer with greater than 100,000 square feet of, and was again vetoed by Governor Schwarzenegger. Support arguments: Supporters, including the American Federation of State, County, and Municipal Employees, state that "SB 469 does not limit local control; it empowers local governments to make the best decisions for their own constituents?.There is no down side to increased information and SB 469 Page 7 well-informed decision making." Opposition arguments: Opponents, including the California Chamber of Commerce, argues that "SB 469 takes away the power of a community to build itself and is a heavy handed mandate on local government." Opponents also believe that the bill creates another layer of bureaucracy to local governments making it more difficult to bring new jobs. Analysis Prepared by : Katie Kolitsos / L. GOV. / (916) 319-3958 FN: 0002202